Is Apple Underpaying Its Retail Employees?

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If there is any company that can be said to be on the cutting edge of retail, it’s Apple. Yes, the Most Profitable Company in the World has come to be one of the most admired names in business not only because of its irresistible products, but also because of the one-of-a-kind retail experience that the company offers its customers. Going to an Apple Store is an event in and of itself. The stores’ inviting product layout, stripped-down and curated selection and aesthetically pleasing architecture make shopping there fun — something absolutely necessary for brick-and-mortar retailers to achieve in a world increasingly dominated by cheap and easy e-commerce.

The secret of Apple Stores’ success has a lot to do with their staff as well. Apple specialists are friendly, laid-back and knowledgeable, and the customer service they offer is usually excellent. Since these employees play a part in driving Apple’s world-beating sales, it stands to reason that they should be appropriately compensated for their contribution.

But a New York Times feature on Sunday argues that despite Apple sales associates’ contribution to the firm’s success — Apple’s 327 global stores took in more money per sq. ft. than any other U.S. retailer — the firm doesn’t pay its store employees nearly as much as other dealers (like Verizon and AT&T, which also offer their products) pay theirs. Unlike those phone carriers, which offer their sales associates commission, Apple Store employees are paid a flat hourly rate — on average, $11.91 an hour.

So is Apple underpaying its employees? There are a few standards by which we can answer this question. Twelve bucks an hour is nothing to write home about, but according to the article Apple also “offers very good benefits for a retailer, including health care, 401(k) contributions and the chance to buy company stock, as well as Apple products, at a discount.” Roughly $25k a year with benefits isn’t easy to get by on, but for a young, single worker in most areas of the country, it’s doable.

(MORE: Future of Retail: Companies That Profit by Investing in Employees)

And according to the article, Apple’s pay practices stack up well against other retailers like Best Buy, which pays its associates on average $9.99 per hour, or Lululemon, which pays its store employees an average of $12 per hour. The difference between Apple and these other retailers, of course, is the unfathomably huge profits that Apple is bringing in each quarter. But how much of this can actually be attributed to its workforce? The Apple Store is a great experience, but nobody would be talking about it if it weren’t for the products in the store. In other words, the giant sales per-sq.-ft. numbers that the Times repeatedly cites is more a credit to the products designed in Cupertino, Calif., than the slick sales skills of Apple workers across the country.

Though there is a case to be made that labor isn’t getting its fair share of the capitalist pie these days, it’s tough to look at Apple retail employees and say they are specifically being exploited — especially when their case is compared with those of the millions of workers overseas who work just as hard as their American counterparts, and are just as integral to the success of the company but are forced to work for far less.

The more easily addressable question is whether Apple is investing enough in its employees for its own good. And by reading Apple’s actions in the past few months, it’s clear that the company believes it needs to invest a little more. In fact, the most salient thread of the Times article is how Apple is just now adjusting to the explosion in foot traffic that its stores have seen following the introduction of its wildly popular iPhone and iPad products. More traffic means more sales, and more work and stress for each individual worker. Since these workers aren’t getting paid based on commission, the company must take care to increase pay when the workload increases.

But it is only recently that Apple has seen noteworthy increases in employee unhappiness as measured by their internal surveys, and Apple has responded recently by giving many of its hourly employees significant raises.

I wrote last week about how retailers are getting ahead by investing in employees, but investment goes beyond just hourly pay. Firms also invest in their workers by teaching them skills and giving them something to put on their résumés, by offering a path to better employment either at that firm or elsewhere. And according to the Times article, former employees said that “Apple can be a strong credential to have on a résumé … technicians often move on to higher-paying jobs in information technology … and sales staff have a leg up on the competition if they stay in retailing.”

(MORE: Should Americans Care About Apple’s iPhone-Factory Conditions?)

Now, Apple is a good thing to have on the résumé not because future employers love their iPads. The only reason such a name would have value is if that company bestowed skills — like superior customer service and intimate knowledge of a hegemonic technology — on their workers.

Our economy is going through trying times, and every hardworking laborer in America and across the globe could use some added pay. And there is plenty of reason to believe that corporations need to change their attitude toward labor expenses. But the force that will be most effective in creating that change is the force of self-interest. It is difficult to create a retail-shopping experience that will separate you from the pack if you have underpaid and unhappy employees. And to this point, I don’t think it’s fair to say that Apple has this problem.

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